CCS (Pension) Rules, 1972

Underlying principles for grant of pension.

(i) Pension is a stated allowance or stipend granted in consideration of

past service.

(ii) Service should be under the government;

(iii) Substantive appointment is a pre-condition;

(iv) There should be a minimum qualifying service;

(v) Pension cannot be forfeited except for grave misconduct;

(vi) No recovery can be made from pension without the express consent of
the government servant;

(vii) Pension is secure against attachment, seizure in compliance of the

decree of the court;

(viii) Pension has been declared as property within the purview of article
300-A (Right to property) and consequently pension can be enforced
through writ of mandamus;

In short pension is a protected possession and sacrosanct.

What are the conditions for the grant of Pension?

Conditions for grant of Pension:

(a) The claims for retirement or death benefits should be regulated on the
basis of rules in force on the date of retirement/death;

(b) A government servant is not eligible for more than one pension on the
basis of same qualifying service;

(c) The date of retirement is always a working day except in the case of
voluntary and premature retirement;
(d) Date of death is always a working day so also date of resignation;

(e) Future good conduct is an implied condition for the grant of pension and
its continuance. If a pensioner is convicted of a serious crime or found
guilty of grave misconduct, the whole or part of pension can be
withdrawn or withheld whether permanently or for a specified period by
an order of appointing authority. If any part of pension is withdrawn or
withheld, the balance pension should not be less than the minimum
pension namely Rs.3500/- P.M.

(f) If a pensioner is convicted of any crime by the court, such withdrawal or

withholding can be ordered straightway on the basis of judgement. In
other cases a notice of reasonable opportunity should be given before
ordering withholding or withdrawal of pension;

(g) President of India reserves the right to withdraw or withhold the pension
either whole or part, either permanently or for a specified period, and
also of ordering recovery from pension of the whole or part of any
pecuniary loss caused to the government, if in any departmental or
judicial proceedings, the pensioner is found guilty of grave misconduct
or negligence during the period of his service.

(h) If the departmental proceedings, where instituted before retirement, the

proceedings will be continued and finalised by the same authority even
after retirement and that authority will submit the inquiry report and its
finding to the President of India.

(i) On the other hand, if the disciplinary proceedings have not been
initiated while in service, before retirement, it cannot be instituted after
retirement without the sanction of President of India.

(j) More importantly no such proceedings can be instituted in respect of

any events which took place more than four years before institution of
such proceedings.

(k) If any recovery is ordered from pension, such recovery should not
exceed 1/3 of the pension, excluding dearness relief.
Commercial employment of the Pensioner:

This is treated under three categories:

(a) Group ‘A’;

(b) Group ‘B’; and

(c) Employment under any foreign government.

If a pensioner who was group ‘A’ immediately before retirement is to

accept commercial employment within 1 year of his retirement, he should get
prior sanction from government. If he is accepting any commercial
employment after one year, he should intimate the government, whether he
had any official dealings with the company in which he is proposed to be
employed.

If the pensioner who was group ‘B’ immediately before retirement has to
take up any commercial employment within one year, he should inform the
government stating whether he had any official dealing with the private
company while he was in service.

A pensioner retired from group ‘A’ should obtain prior permission of the
Central government for accepting any employment under any foreign states.

If any of the above provisions are violated it is competent for the

government to deny, withdraw, or withhold either full or part pension either
permanently or for a specified period after giving a suitable notice of
opportunity of making representation against the proposal.

In commercial employment following points should be taken note of:

(i) A No objection certificate should be obtained from cadre controlling

authority as well as from the office from where he retired;

(ii) Whether the officer was privy to any sensitive or strategic information
during the last three years and whether such information is related to
the organisation where he intends to join;
(iii) Whether there is any conflict of interest between the policy of the office
which he held during the last three years and the policy of the proposed
organisation;

(iv) whether the proposed organisation is prejudicial to the interest of our

foreign relations or domestic harmony or whether said company is
prejudicial to internal security/intelligence gathering;

(v) What was the rate of integrity of the officer while in service;

(vi) Whether the proposed emoluments are excessive;

(vii) what is the financial circumstances of the pensioner.

After examining the above points the case will be put up as under:

(a) Application of pensioner of group ‘A’: Secretary and equivalent – to

be decided by group of Ministers comprising MOS (Personnel) and the
Minister of Administrative Ministry and final approval by Prime Minister.

(b) Group ‘A’ – Joint Secretary & above but less than Secretary – to be
considered by Group of Ministers with aforesaid composition. If the decision
is unanimous, it need not be put up to the Prime Minister. If there is any
difference of opinion, Prime Minister is to decide.

(c) The officers of below Joint Secretary to be disposed of by the Ministry

and approval by Minister in charge.

Kinds of Pension:

Pension is divided into two categories:

(a) Ordinary

(b) Extra-ordinary
Ordinary pension is divided into following categories:

(1) Superannuation Pension;

(2) Retiring Pension (This is further divided into (a)Voluntary retirement

(b)Premature retirement (c)Absorption pension (d)Surplus Pension
(e)Special Voluntary retirement scheme);

(3) Invalid pension;

(4) Compensation Pension;

(5) Compulsory retirement pension;

(6) Compassionate Allowance;

(7) Family Pension

(1) Superannuation Pension: This is granted to a government servant,

retied on attaining the age of superannuation. The date of retirement is 60
years for all Central employees. A government servant will retire on the last
day of the month of his age of superannuation, notwithstanding the due date
falling on a holiday or Saturday or Sunday. However, if the date of birth is
first of the month he will retire on the last day of the preceding month. No
extension is permissible beyond superannuation. However in respect of
officials dealing with budget or working as a full time member of any
commission, three months extension is permissible. Similarly in respect of
certain group of officers in the Department of Science & Technology and in
respect of Secretaries of certain strategic Ministries, the age of retirement has
been extended after amendment of FR 56.

(2) Retiring Pension:

(a) Voluntary retirement pension: A government servant may retire

voluntarily by giving three months notice to appointing authority in the
following cases:
(a) On completion of 30 years of qualifying service (Rule- 48)

(b) A government servant with 20 years of qualifying service may also retire
(Rule -48A)

(c) Temporary government servant with not less than 20 years continuous
service (GOI’s decision under Rule 48-A).

(d) A government servant after attaining 50 years in the case of group ‘A’ &
‘B’ and 55 years in the case of ‘C’ & ‘D’ (FR – 56(k)).

(e) A group ‘C’ employee not governed by any pension rules after
completion of 30 years of qualifying service [FR-56(m)];

Condition:

(i) The notice once given cannot be withdrawn. However, the appointing
authority may allow the request for withdrawal, provided the request is made
within the intended date of retirement;

(ii) The government servant giving the notice, exercises his statutory rights
and, therefore, the appointing authority cannot withhold his permission to
retire unless the government servant is placed under suspension or
disciplinary/judicial proceedings have been instituted;

(iii) Less than three month notice can also be allowed at the discretion of
appointing authority. However, the commutation of pension can be applied
only after the expiry of 3 months notice period;

(b) Premature retirement: The government can always prematurely

retire a government servant in the following cases after giving 3 months
notice or salary in lieu of:

(a) At any time after completion of 30 years of qualifying service (Rule –

48);

(b) After he attains the age of 55 years for group ‘C’ & ‘D’ and 50 years for
group ‘A’ & ‘B’ [FR-56(j)];
(c) A group ‘C’ government servant, not governed by any pension rule,
after completion of 30 years of qualifying service [FR -56(l)];

(d) Where a government servant is suffering from any contagious disease

or physical or mental disability after medical examination, he will be put
on leave with full salary and consequential benefits.

Conditions:

The notice of premature retirement can be withdrawn by the

government provided the government servant agrees.

(c) Absorption Pension: A government servant, who is permitted

for absorption in any Public Sector Undertaking in public interest is deemed to
have been retired from service from the date of absorption and will be eligible
for retirement benefits, if the corporation has no pension scheme. He will get
monthly pension and retirement gratuity. He can commute the pension also.
If the corporation has pension scheme, the services rendered by the
government servant in central government will count for pension.

(d) Surplus Pension: If a government servant is found surplus

because of the abolition of permanent posts, he will be referred to surplus
cell. If he has not been accommodated within 6 month, he can opt for
voluntary retirement. In case he has put in 15 years of qualifying service he
is entitled for a waitage of upto 5 years. The option has to be exercised
within 2 months of the official being declared surplus.

(e) Special Voluntary retirement scheme: This has been introduced

for the officials who have been declared surplus following the
implementations of the decision of the Cabinet on restructuring of Ministries,
Expenditure Reforms Commission (ERC), rightsizing or downsizing the public
sector units or work study reports of SIUs etc. Under this scheme all
permanent employee rendered surplus are eligible. The optees are entitled
for basic pay + DA of 35 days for each completed years of service and 25
days for each remaining year. For the part of the year the number of days will
be worked out on the basis of 365 days in a year. The total number of years
shall not exceed 33 years.
(3) Invalid Pension: This is granted on retirement from service to a
government servant who is permanently incapacitated for further service due
to physical inability or mental infirmity. A government servant who desires to
retire on invalid pension should apply to Head of Office who will direct him to
the appropriate medical authority. Certificate of incapacity obtained direct
without the direction of Head of Office is invalid. The official after invalidation
should be relieved immediately. If he is on leave, he will be relieved on expiry
of leave. The invalid pension should not be less than the family pension.

(4) Compensation Pension: This is granted to a government servant

who is discharged from public service due to abolition of his permanent post,
if a suitable appointment of equal rank cannot be found for him. If a lower
post is offered and not accepted by the government servant even than the
compensation pension is payable. If lower post is accepted, then the
previous service will be included with the services of lower post. No
compensation pension is payable for mere abolition of duty or abolition of
allowances or abolition of extra departmental post.

(5) Compulsory retirement pension: Compulsory retirement is a major

penalty which is imposed where the continuance of the government servant in
service is undesirable. But at the same time the extreme penalty of removal
or dismissal with a consequent loss of pension is considered too severe. The
compulsory retirement pension should not be less than 2/3 of the normal
pension. The reduction can be made either in pension or in gratuity.

(6) Compassionate Allowance: The term allowance is a misnomer.

Compassionate allowance is a full fledged pension. This can be commuted
also. A government servant who is dismissed or removed from service
forfeits his pension and gratuity. However, if a case deserves special
consideration because of family circumstances, the appointing authority can
take a compassionate view and sanction what is called a “Compassionate
Allowance”, which should not exceed 2/3 of the normal pension and should
not be less than the minimum pension. Retirement gratuity not exceeding 2/3
and no encashment of leave is admissible.
(7) Family Pension:This was introduced with effect from 1 st January 1964,
a social security scheme. This is granted to the family of the government
servant who died while in service or after retirement. Under this scheme the
family will get family pension under the following circumstances:

(a) In the case of death while in service, if the government servant has
completed one year continuous service;

(b) Where a government servant was medically examined, found fit, joined
service and died in service, before completion of one year;

(c) In the case of death after retirement, if the pensioner is in receipt of

pension. Family pension is payable to only one person at a time. It is
first payable to widow or widower till death or remarriage whichever is
earlier. Then it passes on to sons and daughters than it passes on to
dependent parents, provided the government servant has not left
behind any son or daughter.

Extra Ordinary Pension:

The basic condition for the grant of pension is that a government

servant is not entitled for more than one pension on the strength of same
qualifying service. If such a pensioner is granted more than one pension on
the strength of same qualifying service that is called extra-ordinary pension.
For example, if a government servant is boarded out (retrenched) from
government service because of the disability due to wound or injury or
disease and such disablement is accepted as due to Government service, the
government servant will be granted disability pension, which is in addition to
invalid pension and gratuity.

If a government servant’s disablement on account of wound, injury or

disease, is accepted as due to government service and if he is retained in
service, despite such disability, he will be paid compensation in lump-sum in
view of disability pension, which is called disability award.

If such a government servant dies and the death is due to such injury
acquired during government service, the family of such a government servant
will be paid extra-ordinary family pension in higher rate.

An award made under these rules shall not affect any pension or
gratuity other than family pension.
Authorisation of Pension:

Drawal and payment of pension has been placed at the responsibility of

Head of Department and Accounts Officer. The need for Administrative
sanction for the grant of pension has been dispensed with. Now it is to
ensure that pension/family pension is paid on the first (1 st) of the month on
which it is due as if it is a salary.

Head of Department should prepare a list of Officers due for retirement

within next 24 to 30 months as on 1st January and 1st July in each year, to be
prepared by 31st January and 31st July. A copy of this list will be given to
Accounts Officer and Head of Office.

Head of Office will now identify those among the officials, who are due
for retirement within next 24 months, who are in occupation of government
accommodation and address the Directorate of Estates or Estate Officer for
No Demand Certificate.

In respect of Officials due for retirement in the next two years,

preparation of pension papers, including Form-5, Form-7 and Form-8 should
commence. This has three stages. The objective is to forward all papers to
the Accounts Officer at least 6 months ahead of retirement so that the
Pension Payment Order (PPO) is issued at least one month in advance of
retirement.

First stage: The first stage is, the Head of Office should go
through the service book of all such officials to find out whether certificate of
verification of service has been recorded for the entire service. In respect of
unverified period of service, consult pay bills and other relevant records and
record the required certificate. If the unverified service relates to other
offices, make a reference to that office and obtain verification certificate. If
any service is left out without verification take a written statement from the
government servant giving details of such service with the declaration as to
the truth of the statement and also collateral documentary evidences and on
the basis of such statement and documents treat this period of service as
verified.
Second stage: The second stage is to deal with omission, imperfections
and deficiencies in the entries of service book, while carrying out the
verification. Every efforts should be made to rectify these omissions. If,
inspite of these efforts, it is not possible to rectify, the qualifying service could
be determined on the basis of entries in the service book. For the purpose of
average emoluments, the average of the emoluments drawn during the
preceding 10 months is to be calculated. For this purpose, the emoluments
for 24 months preceding to the date of retirement should be verified.

Rule 257 of GFR lays down annual verification of service by Head of

Office. By the end of April each year, the Head of Office is required to
provide a certificate to the next higher authority on completion of verification
of service in respect of all officials working under him.

Similarly in respect of officials who have completed 25 years of services

and who are left with only 5 years of service, the Head of Office, in
consultation with Accounts Officer, should verify the service, determined the
qualifying service and communicate to the retiring government servant.

Third Stage: The Head of Office has to intimate the government

servant 10 months ahead of his retirement, the total qualifying service,
average emoluments, which are proposed to be admitted. The government
servant is entitled to represent with supporting documents against any
discrepancy.

The Head of Office should now finalise the application for pension. He
should sent Form-5 to the retiring government servant and ask him to submit
at least 8 months ahead of retirement.

After receipt of the application, the Head of Office will finalise

emoluments, average emoluments, qualifying service, pension, gratuity and
family pension, collect Form-5 and Form-7, prepare three copies of
calculation sheet, obtain joint photograph, updated service book and sent
them to Account Officer with a forwarding note in Form-8 at least 6 months
ahead of retirement, simultaneously retaining one copy of these documents in
the office.

Before sending, the reply received from Directorate of Estates,

regarding arrears, if any, of Licence Fee should be taken into account. Head
of Office should ensure the recovery of Licence fee upto the date of
retirement. If the government servant wants to retain quarter for permissible
period after retirement, the licence fee due will be recovered from gratuity.
Similarly, any event, which has a bearing on the drawal of pension and
gratuity, occurred after the despatch of pension papers, should be promptly
reported to the Accounts Officer.
 After necessary checks, the Accounts Officer will issue pension
payment order (PPO) at least one month in advance of retirement. The
Accounts Officer will inform the Head of Office the amount of gratuity with a
remark that the gratuity be drawn after adjustment of government dues.

Provisional Pension & Provisional Gratuity:

If it has not been possible to complete and forward the pension papers
to the Accounts Officer before six months or the Accounts Officer could not
issue Pension Payment Order one month ahead of retirement for want of
information or clarification, then the Head of Office will authorise provisional
pension and Provisional gratuity by 1st of the month in which it is due. For this
purpose such information available on record, should be used. If no
information is available, the Head of Office will get a statement from the
government servant giving total length of service and emoluments for the last
10 months. The government servant should certify the truth of the statement.
If complete information regarding emoluments is not available, last pay drawn
should be taken as average emoluments and 100% pension and 100%
gratuity shall be calculated and authorised as provisional pension and
provisional gratuity. However, 10% of the gratuity or Rs.1,00,000/-,
whichever is less, would be deducted from such gratuity towards the recovery
of un-assessed dues including arrears of licence fee as well as damage to the
quarter. This will be provisional subject to adjustment after issue of final
Pension Payment Order.

Provisional Pension should be made final after six months. It is the

responsibility of Accounts Officer to finalise provisional pension. In case no
final PPO is issued at the end of six months, provisional pension and
provisional gratuity will automatically become final pension and final gratuity
at the cost of the officials responsible for delay in finalising the pension case.

If the provisional pension is more than the final pension, excess would
be recovered from final gratuity or by short payment of future pension.
However, if the provisional gratuity is more than final gratuity, no recovery will
be made.

The above provision of automatic finalisation of provisional

pension does not apply to cases where provisional pension is granted
pending finalisation of Departmental proceedings/judicial proceedings.
 In respect of a government servant who retired on superannuation or
otherwise or against whom the departmental or judicial proceedings have
been instituted or continued, the Head of Office will draw and pay provisional
pension admissible on the basis of qualifying service till the date of
retirement. This provisional pension is granted only for 6 months, unless
extended by specific orders of competent authority. In this case no gratuity is
payable.

Revision of Pension: - Very Important

Rule – 8 and Rule – 9 of CCS (Pension) Rules, 1972 authorise

withdrawal or withholding of pension under certain circumstances by certain
authorities. The basic rule is that the pension after final assessment cannot
be revised to the disadvantage of the pensioner, unless such a revision has
become necessary due to detection of a clerical error subsequently. No
revision can be allowed to the disadvantage of the pensioner without the
concurrence of Ministry of Personnel & Public Grievance & Pensions, if such
a clerical error is detected after two years from the date of authorisation of
pension. For this purpose the government servant would be served a notice
by the Head of Office to refund the excess money within two months, failing
which the Head of Office will order short payment of future pension in one or
more instalment.

Qualifying Service: After 6th Central Pay Commission from

02.09.2008, the length of qualifying service has been delinked from quantum
of pension. The service which qualifies for pension is qualifying service.

(1) Qualifying service starts from the date of substantive appointment into
the service subject to:

(i) Service before attaining 18 years will not count for any purpose except
compensatory gratuity; and

(ii) If appointed in temporary or officiating capacity such service is treated

as qualifying service if confirmed in the post without break.

(2) Service should be under the Central Government;

If a government servant of the state appointed initially on deputation,

got permanently transferred to Central government, the continuous service
under the state in officiating/temporary capacity followed by substantive
appointment without break qualifies for pension.
 Service terminates on the last day of the month in which the
government servant attains 60 years of age. If the date of birth is 1 st of the
month, then the last day of the preceding month.

Date of retirement is a working day except in the case of voluntary and

premature retirement.

Date of death is a working day so also date of resignation.

Training:

Government can decide whether the period of training spent

immediately before appointment, counts for pension. In respect of Group ‘C’
& ‘D’, pre-induction period of training is always treated as a qualifying service
provided it is followed by immediate appointment and confirmation. If the
government servant is already in service and deputed for training, the training
period is treated as duty and thus qualifying service.

(1) Joining time qualifies for pension.

(2) Service on probation, if followed by confirmation, qualifies for pension.

(3) Period of apprenticeship does not qualify except SAS Accountant in

Indian Audit & Accounts Department.

(4) All leave, except Extra Ordinary Leave without medical certificate
counts for pension.

(5) Extra Ordinary Leave without medical certificate also qualifies for
pension on two occasions:

(a) When the EOL is taken for prosecuting higher studies in

Technical or Scientific subject

(b) When EOL was taken due to inability of the government servant
to join or rejoin duty on account of civil commotion and civil
unrest.

In other words EOL taken on other grounds does not qualify. However,
for non-qualifying EOL, there should be a definite entry in the service book.
In the absence of such an entry, it is also treated a Qualifying Service.
(6) Suspension, followed by death, minor penalty, full exoneration, found
wholly unjustified is treated as Qualifying Service. If any period of suspension
is not to be treated as Qualifying Service, a specific entry is needed. In its
absence it is also treated as qualifying service, subject to the following:

(i) In the absence of specific indication to the contrary in service record, an

interruption between two spells of service will be automatically condoned and
pre-interruption service is treated as qualifying service except where it is
known that the interruption was caused by resignation or removal or dismissal
or participation in strike. The period of interruption itself will not be treated as
qualifying service under any circumstances.

Resignation: Resignation forfeits past service. However, if the

resignation is allowed to be withdrawn or if the resignation is submitted to
take up another appointment under the government, it will not forfeit past
service. If there is any interruption or break, the period can be treated as
leave admissible.

Counting of period of deputation to UN Organisation or ADB, World

Bank or Commonwealth Secretariat:

A government servant, deputed for foreign services, for the above

organisation, for three years or more has two options:

(a) Either pay pension contribution in respect of foreign service and count
this service as qualifying service; or

(b) Avail the retirement benefits extended by such UN Bodies and forgo the
service.

Interruption:

Interruption has not been defined in FR & SR, whereas service has
been defined. Service means duty. Interruption is therefore any kind of
break in service.

Interruption is of two kinds:

(a) Which forfeits past service;

(b) Which does not forfeit past service.

 Dismissal and removal forfeits past service. If a person so dismissed or
removed, is reinstated on appeal or review, the past service is restored.

Resignation other than technical resignation forfeits past service.

Participation in strike, regulated under FR-17A forfeits past service for

some specific purpose.

Which does not forfeit?:

(a) Authorised leave;

(b) Unauthorised absence in continuance of authorised absence;

(c) Suspension followed by death, followed by minor penalty, followed by

exoneration;

(d) Joining time, period of training.

Qualifying period of service:

(a) Qualifying Service should be expressed in 6 monthly slabs or half yearly

slab;

(b) Fraction of a year equivalent to 3 months and above but less than 9
months is 1 half year slab;

(c) 9 months and above is two half year slab.

In other words:

(i) Less than 3 months is equal to nil half year slab;

(ii) 3 months and above but less than 9 months is equal to 1 half one year
slab;

(ii) 9 month & above is equal to 2 half year slab.

For Example:

(1) 9 years and 9 month is equal to 20 half year slab;

(2) 19 years 2 months 20 days is equal to 38 half year slab;

 Similarly months is always a calendar month in calculating any period.
Complete calendar month should be calculated first and then add number of
days.

30 days is equal to a month.

Example:

(1) From 25th January, calculate 3 months and 20 days.

S. Period Years Months Days

No.
1 25th January to 31st January - - 07
2 February to April - 03 -
3 1st May to 13 May - - 13
Total 03 20

(2) Calculate the period from 30th January to 2nd March.

S. Period Years Months Days

No.
1 30th January to 31st January - - 02
2 February - 01 -
3 1st March to 2nd March - - 02
Total - 01 04

(3) Calculate the period from 2nd January to 30th May.

S. Period Years Months Days

No.
1 2nd January to 31st January - - 30
2 February to April - 03 -
3 1st May to 30th May - - 30
Total - 05 -

Emoluments & Average Emoluments:

Average Emoluments: From 2nd September 2008 in all cases of

retirement with a Qualifying Service of 10 years or more, pension will be 50%
of the emoluments or 50% of the average emoluments, whichever is
beneficial to the retiree.
 Emoluments for the purpose of Pension, includes Pay in the Pay bands
+ Grade Pay + Non-practicing Allowance + Stagnation Increment.

Emoluments for the purpose of gratuity is Pay in the Pay band + Grade
Pay + Non-practicing Allowance + Stagnation Increment + Dearness
Allowance.

What emoluments should be taken into accounts on various occasions?

(1) Leave with leave Salary – Emoluments which he would have drawn had
he not gone on leave, but for leave.

(2) Suspension followed by re-instatement – Pay & allowances drawn but

for suspension.

(3) Leave during officiating period in the higher post – Higher officiating pay
is taken into account if necessary certificate is given (But for proceeding
on leave, he would have continued to hold the post).

(4) Leave immediately after transfer from higher post – higher officiating
pay will be taken into account if necessary certificate is given as above.

(5) EOL which is treated as qualifying service – Emoluments drawn before

proceeding on EOL.

(6) Foreign Service – The pay which he would have drawn but for his
foreign service.

If a government servant is on leave, before retirement or before death

and earns a increment during the period of such leave that increment will be
included in the emoluments even though it is not drawn, provided it falls
within 120 days of EL.

How do you calculate 10 months?

(a) In the case of retirement on superannuation, last day of the month.

(b) If the date of birth is 1st of the month, last day of the preceding month.

(c) In the case of voluntary and premature retirement, retirement can take
place on any day.

(d) Date of retirement in the case of Rule 48, Rule 48-A, GOI decision
under Rule 48A, FR-56 (m), FR-56 (k), FR-56 (j) and FR-56 (l) – will be
the day prior to the date of retirement.
(e) Date of death and date of resignation are working days.

(f) The leave without pay, suspension not treated as qualifying service,
over-stayal of leave, over-stayal of joining time and period of dies non
should be ignored and equal period taken before 10 months.

How do you calculate Pension & Gratuity?

Pension & Gratuity:

Retirement benefits comprises

(1) Pension – a monthly recurring payment;

(2) Gratuity – a lump-sum

(A) A government servant with less than 10 year qualifying service is not
eligible for pension. Instead only service gratuity @ 50% of the emolument,
for every six monthly slab;

(B) A government servant with 10 years or more service will get pension.
In other words, a government servant, on his retirement gets either pension
and retirement gratuity or service gratuity and retirement gratuity.

(C) Service gratuity is in lieu of pension and is payable for 6 month service
onwards.

(D) Retirement gratuity is payable, if the minimum qualifying service is 5

years or more.

(E) In addition to the minimum qualifying service, substantive appointment

is a pre-requisite for pension and gratuity. However, 10 year temporary
service is treated at par with the substantive appointment for superannuation
and invalid pension. Similarly 20 years of continuous service is treated as
substantive appointment in all cases of pension and gratuity.

In nut-sell

(1) Pension is equal to substantive appointment + 10 years or more

qualifying service;

(2) Retirement gratuity is equal to substantive appointment + 5 years or

more qualifying service.
(3) Service gratuity is equal to no service limit but 6 months qualifying
service onwards.

After the 6th Central Pay Commission recommendation, following

principals have been laid down:

(1) In the case of retirement – On or after 01.01.2006, pension shall not be

less than 50% of the minimum of the pay band + Grade pay for the post held
by the government servant at the time of retirement;

(2) While calculating pension, ascertain the qualifying service, average

emoluments and emoluments. If the qualifying service is 10 years or more,
find out 50% of the emoluments as well as 50% of average emoluments.
Then find out which is beneficial to the pensioner. That will be the pension in
all cases of retirement.

(3) From 1.1.2006 pension and family pension is subject to the minimum of
Rs.3,500/- per month.

(4) If the pension so calculated is less than Rs.3,500/-, then it should be

stepped up to Rs.3,500/-. This minimum limit is applicable to all kinds of
pension, including compassionate allowance, and absorption pension. This
minimum is applicable to original pension before commutation. Similarly, in
case the family pension is divided in equal shares among the widows, or
twins the minimum is applicable to the original pension before division.

Similarly the maximum pension from 01.01.2006 is Rs.45,000/- per

month. Ceiling should be applied on original pension.

The amount of pension and gratuity should be rounded off to the next
higher rupees so also, the family pension. If family pension is divided among
the twins/widows, each such divided pension shall be rounded off to the next
highest rupees, subject to the total of all such family pension not exceeding
the maximum family pension stipulated.

Retirement Gratuity: [Very Important]

This is granted to a government servant on his retirement if he has

rendered not less than 5 years qualifying service and also holding a
substantive appointment. The rate is equal to ¼ of the emoluments for each
half year slab subject to a maximum of 16-1/2 times of emoluments and again
subject to a maximum of Rs.10,00,000/-. This is no ceiling for the reckonable
emoluments.
Death Gratuity:

4th Central Pay Commission has divided the DCRG into retirement
gratuity and death gratuity. The former is granted in the event of retirement
while the later is granted in the event of death.

The rate of death gratuity is higher than the retirement gratuity as may
be seen below:

(i) Less than one year service – 2 times of emoluments

(ii) One year and more but less than 5 years – 6 times of emoluments

(iii) 5 years and more but less than 20 years – 12 times of emoluments

(iv) 20 years or more – 50% of the emoluments for every half year subject
to a maximum of 33 times of emoluments and against subject to a maximum
of Rs.10,00,000/- and there is no ceiling for the reckonable emoluments.

Residuary gratuity: Important The death gratuity payable in the

case of death of a government servant while in service after completion of 5
years of qualifying service is subject to a minimum of 12 times of
emoluments, which he was drawing at the time of death. However, there is
no such minimum in the case of retirement gratuity, payable on retirement.
Therefore, if a government servant dies within 5 years from the date of
retirement and the money actually received by him at the time of death on
account of pension or service gratuity and retirement gratuity happen to be
less than 12 times of emoluments, then the deficiency may be granted to the
family and this deficiency is called residuary gratuity. This is based on the
principle that a benefit which is accrue in the case of a death while in service
should not be denied in the case of death immediately after retirement.

Additional Pension: (Recommendation of 6 th CPC)

Consequent upon the recommendation of the 6 th CPC, the government

has introduced additional pension to the following extent:

1 80 years 20% of basic pension

2 85 years 30% of basic pension
3 90 years 40% of basic pension
4 95 years 50% of basic pension
5 100 years 100% of basic pension
 It is permissible to recover government dues from gratuity even without
the consent of the government servant or family of the deceased government
servant. However, no recovery can be made towards the pecuniary loss
caused by the government servant.

Gratuity is not subject to income tax.

Family Pension, 1964: [Very Important – PQ]

It is a social security scheme introduced from 01.01.1964, admissible to

the family of the deceased government servant where he dies:

(1) After completion of not less than 1 year continuous service;

(2) Before completion of 1 year, if the government servant was medically

examined, found fit, joined service and died in service;

(3) After retirement from service and has been in receipt of pension at the
time of death.

Therefore, a government servant who retires from service before

completion of 10 years is not entitled for pension and instead only for service
gratuity. If such a person dies after retirement his family is not entitled for
family pension.

Continuous Service:

(1) The continuous service means any service in temporary or officiating

capacity in a pensionable establishment, except period of suspension which
is not declared as a qualifying and boys service.

(2) If he is already in receipt of pension under any other rules of public

sector undertaking or autonomous body or state government, than family
pension scheme 1964 does not apply. Similarly family pension scheme 1964
is not applicable where extra ordinary family pension scheme is applicable.

Rate of family pension:

The rate of family pension is 30% of the basic pay (Pay in the pay band
+ Grade Pay + Non Practising Allowance + Stagnation Increment, if any)
subject to a minimum of Rs.3,500/- per month and maximum of Rs.27,000/-
per month.
Enhanced Family Pension:

From 01.01.2006 where a government servant not governed by

workman’s compensation Act, dies after 7 years of service, the family pension
would be 50% of last pay drawn. This higher family pension would be
payable for 10 years without any age limit. In the case of death of a
pensioner, the enhanced family pension will be payable for 7 years or for the
period upto which the pensioner would have attained the 67 years of age,
whichever is earlier. In this case the family pension would be the amount of
pension authorised to such a government servant.

After expiry of the period, normal family pension would be restored.

Regulation of Family Pension: [Very Important]

Family Pension is payable to the family of the deceased government servant.

Family means:

(a) Wife (Whether marriage took place before or after retirement);

(b) Husband (Whether marriage took place before or after retirement);

(c) Unmarried sons/unmarried daughters (Born before or after retirement);

(d) Widowed or divorced daughters (Born before or after retirement);

(e) Disabled/Mentally challenged sons and daughters;

(f) Disabled and mentally challenged brother/sisters;

(g) Parents who are dependent on the government servant at the time of
death; and provided the deceased government servant did not leave behind
any spouse, son or daughter or brother or sister and the earnings are less
than Rs.3,500/- per month. For parents only normal rate of family pension is
allowed.

Period for which family pension is payable:

(i) In the case of childless widow – for life or till earning livelihood i.e.
Rs.3,500/- per month (even after re-marriage) – eligible;

(ii) In the case of a widow with child or widower, till death or remarriage,
whichever is earlier;
(iii) In the case of unmarried son and unmarried daughters, till 25 years of
age or marriage or earning livelihood or death, whichever is earlier;

(iv) In the case of handicapped sons or daughters or divorced or widowed

or unmarried daughters or dependent/handicapped brothers and
sisters, family pension is payable till death or marriage/remarriage or
earning livelihood, whichever is earlier;

(v) In the case of wholly dependent parents, till his or her death. Among
the parents first payable to mother and on her death to father;

The family pension is payable to only one person at a time except when
it is payable to more than one widow or twins:

(i) First it is payable to widow or widower. In the case of childless widow,

till death or earning livelihood (even after remarriage).

(ii) In the case of widow with child, till remarriage or death, whichever is
earlier.

(iii) In the case of widower, till remarriage or death whichever is earlier.

(iv) After this the family pension passes on to sons and daughters
according to their age, irrespective of sex and the younger will become
eligible only after the elders become ineligible. They will get till 25
years of age or earning livelihood or marriage or death, whichever is
earlier. After this it passes on to the next son or daughter, according to
age. Wholly dependent parents will become eligible only if the
deceased government servant has left behind neither a widow/widower
nor any eligible son or daughter nor any eligible brother or sister. The
earnings of the parents should be less than Rs.3,500/-.

(v) If the son or daughter is disabled of mind or physically crippled or the

daughter is unmarried or widowed or divorced and unable to earn
livelihood, they are eligible for family pension for life i.e. till death or
earning livelihood or marriage or remarriage.

(vi) If such a son or daughter is one among the two or more children, the
family pension is initially payable to the children as explained in pre-
para, until the last child attains 25 years of age and thereafter the family
pension is restored in favour of physically or mentally handicapped son
or daughter or widowed or divorced or unmarried daughters or
physically or mentally handicapped brothers and sisters. This will be
payable for life or earning livelihood or marriage or remarriage (for
daughters/brothers/sisters).
(vii) If there are more than one such child or brother or sister who is
physically or mentally handicapped, unmarried/divorced/widowed/
handicapped daughters, family pension will be payable according to
their age and the younger will get only when the elders become
ineligible.

(viii) The requirement of manifestation of disability before retirement/death is

a pre-condition for the grant of life pension, has been dispensed with.

(ix) Family pension is payable to the children born from void or voidable
marriage. However, they have no claim for family pension if legally
married wife is alive.

(x) In the case of eligible twins, family pension is payable in equal shares.
When one child ceases to be eligible that share goes to the other. If
both become ineligible, the family pension lapses.

Family pension for judicially separated wife or husband:

If a male government servant dies leaving behind a judicially separated

wife and no child, the wife will get family pension if the judicial separation was
not given on the charge of adultery.

Similarly if a female government servant dies leaving behind a judicially

separated husband with no child, the husband will get the family pension if
the judicial separation was not given on the charge of adultery.

If they have children, family pension can be given to them only if he or

she is the guardian of the children. When the children become ineligible,
family pension will go to wife or husband.

Family pension when both Husband and wife Government servant:

There is no bar for a government servant/pensioner drawing family

pension in addition to his or her pay or pension. In case, either of the couple
dies in service or after retirement, the family pension in respect of the
deceased shall be payable to the surviving spouse.

If the surviving spouse also dies subsequently the child or children of

the deceased parent will get two family pensions subject to the following:

(i) If two family pensions are at the enhanced rate, the total will be
restricted to a maximum of Rs.45,000/- per month.
(ii) If both family pension are at normal rate the total is limited to a
maximum of Rs.27,000/- per month;

(iii) If one is at enhanced rate and the other is at normal rate, then the limit
is a maximum of Rs.45,000/- per month.

Family pension scheme 1964 is not applicable in the case where extra-
ordinary family pension is given. Similarly commutation of pension has no
effect on the quantum of family pension because the rate of family pension is
based on pay and not pension.

Central Civil Service (Commutation of Pension) Rules 1981

Commutation of Pension: [Very Important]

Commutation is the surrender of a portion of pension for getting a lump-

sum.

A part of pension, not exceeding 40% of all cases of pension including

compassionate allowance, but excluding family pension can be commuted.
The part of pension offered for commutation should be expressed as % of
whole pension. Fraction should be ignored.

A government servant or pensioner facing disciplinary or judicial

proceedings cannot apply for commutation till finalisation of such
proceedings.

Provisional pension can also be commuted except where the

provisional pension was granted pending departmental or judicial
proceedings;

There are two method of commutation:

(i) Without medical certificate; and

(ii) With medical certificate

In respect of following medical examination is not essential:

(a) Superannuation pension;

(b) Retiring Pension;

(c) Absorption pension;

(d) Compensation pension; and

(e) Pension sanctioned after finalisation of disciplinary proceedings.

In the case of superannuation, application can be submitted 3 months

in advance but before superannuation. In other cases commutation can be
applied within one year and the commutation will become absolute from the
date of receipt of application.

Medical examination is essential in the following cases:

(i) Invalid pension;

(ii) Compulsory retirement pension;

(iii) Compassionate allowance;

(iv) In all cases mentioned in pre-para if the application for commutation is

received after one year.

The application should be submitted to Head of Office who will direct

the applicant to the medical authority who is normally the Civil
Surgeon/District Medical Officer. However, in the following cases medical
board is the medical authority:

(a) Invalid pension;

(b) The applicant was refused commutation on medical grounds;

(c) Where, the applicant declined commutation on the ground that the age
declared by the medical authority is more than the actual age.

In all these cases commutation will become effective when the medical
authority signs a medical report. The official has no option to withdraw unless
the age declared by the medical authority is more than the actual age.

How do you calculate the amount of commutation?

There is a commutation table in CCS(Pension) Rules, 1972, in which

the commutation value has been expressed as number of years purchased
with reference to the age on the next birth day, to be decided on the basis of
date of receipt of application or date of medical report, as the case may be.
The commutation table gives the years purchased from 40 to 70 years,
varying from 8.194 to 6.897.
 Value of commutation is equal to commuted value as per the table X
(multiplied) by 12 and (multiplied) X by the amount offered for commutation.

Example: Mr. X, age on the next birth 61 years, offers to commute 40% of
his pension of Rs.12,000/- per month

Value of commutation is:

8.194 X 12 X 4800 (40% of 12,000/-) = Rs.4,71,974.40 rounded off to

Rs.4,71,975/-

He will get the above lump sum and pension of Rs.7,200/- for 15 years.
After 15 years, the commuted portion will be restored and he will get
Rs.12,000/-. If any part of pension is withheld or withdrawn, commutation will
be only on residual pension.

Reduction in pension will be effective from date of payment of

commuted value or at the expiry of 3 months from the date of authority.

Family Pension in respect of Government servant who are missing or

whose where-about are not known: [Very Important]

If a government servant disappears leaving his family or where the

where-about of the government servant are not known to the family, the
family will be paid the salary due, leave encashment and GPF balance at his
credit, keeping in view the nominations made by the government servant.
Retirement gratuity and family pension would be payable after one year
subject to the following procedure:

What the family should do:

(a) File FIR about the missing of government servant;

(b) Intimate Head of Office where the government servant was last serving;

(c) Immediately on receipt of the information about lodging of FIR, the

Head of Office should pay the pay & allowances, leave salary, which is
due upto the date the employee was serving or on leave, encashment
of earned leave at his credit, GPF balance at credit. Before payment
obtain an indemnity bond to cover the risk.

After one year from the date of FIR (after 6 months in the case of
kidnapping) and after obtaining an un-traceability certificate from police, the
family should apply for family pension, death gratuity etc. This should be
noted that the officials joined after 01.01.2004, are not eligible for these.
 Head of Office will sanction Central Government Employees Group
Insurance without insurance cover.

Family pension will be sanctioned retrospectively from the date of FIR

on the basis pay drawn on the last date of duty.

The death gratuity will be restricted to retirement gratuity.

The aforesaid amount will be paid within 3 months from the date of
application.

After the death is confirmed or at the expiry of 3 years whichever is

earlier the Head of Office will pay:

(i) The difference between death gratuity and retirement gratuity;

(ii) Deposit linked insurance scheme of GPF; and

(iii) Insurance cover

Recovery towards any overpayments or disallowance by Audit should

be recovered from this amount alongwith licence fee arrears, House Building
Advance, income tax arrears, conveyance advance etc.

There should be no recovery from GPF.

New Pension Scheme:

(Applicable for those recruited on or after 01.01.2004)

A short note on pension under new pension scheme

Salient Feature:

Applicable to all new entrants to Central service, except armed forces,

joining on or after 01.01.2004. These officials are not eligible for erstwhile
pension scheme and GPF account.

Contribution: Compulsory or Tier-I – 10% of the basic pay (Pay in

the pay band + GP+NPA+SI, if any + DA) to be deducted from salary every
month by PAO.
 Voluntary or Tier –II – Purely optional. Amount not specified. The
official will contribute when on duty or Foreign Service. No contribution
during suspension. During half pay leave contribution will be restricted to the
proportionate to leave salary. No contribution during EOL.

As the new pension scheme is based on defined contribution, length of

qualifying service is not relevant.

Conditions: No withdrawal is allowed from Tier-I account.

However, accumulation in tier-II, can be withdrawn partly or fully at any time.

Tier-I will have a matching contribution from the government.

Tier-II will not have any such contribution.

Tier-I is linked with pension and Tier-II is not linked with pension.

No special tax treatment for Tier-II

A Central Record Keeping agency and Pension Fund Manager would

manage the scheme.

There will be 3 schemes: A,B,C, based on ratio of investment in equities.

Exit from Tier-I: An employee can normally exit from Tier-I at the age of
60 years or after.

In normal exit 40% of the pension wealth will be used to provide an

annuity which will provide pension for life to the employee/spouse/children &
parents.

He can also exit before the age of 60. But in such case 80% of pension
wealth will be used for purchase of annuity.

Accumulation of credit shall carry an interest @ 8%.